If you are planning to #sell your business, it’s important to understand how unique selling (or attempting to sell) a business is. If you bring your “other things” selling approach to selling your business you can create substantial problems for yourself, and for the potential sale of your business.
Your Business: Your business broker will try to pull comps, and almost certainly fail. Why? Because while your realtor probably found dozens of comparable transactions from your immediate neighborhood, your broker will be lucky to find a handful of comps for sales of your type of business from across the country. And really, how comparable is another business transaction from 1,000 miles away? How many businesses like yours sell every year? How many of those sales are reported? Your broker will show you comps, but they will likely do little to predict how the sales process for your business will go.
How different can it be? You’ve been selling for the last 30 years. You’ve sold cars, boats, your house, and all sorts of stuff on the job. Same thing, just a different color, right?
Your House: When you sell your home, your realtor will find comparable properties for you as you consider what lies ahead. Comps will show what other houses were listed for, what they sold for, how long they were on the market, etc. No perfect examples, but chances are you’ll have a fair sense for what the sales process will look like for your house based on what the comps show.
We like to have a sense for the market when we sell something. Quantitative information helps define our expectations of price and process. What’s the Blue Book value? What’s it selling for on eBay? What are the “comps”?
Most of us have never sold a business, so we equate it to other things that we’ve sold. But using what you know about selling other things can cause you incredible pain when you go to sell your business.